That’s Mr. President Man About Town to You, Bub


Man About Town Transforms at the annual Rock and Bowl A Thon.

Dear Reader, apologies for the absence from the blogosphere, but I’ve been a bit caught up in my new venture as President of Civic Consulting USA - a nonprofit that provides free consulting services to government.  And it is absolutely as sexy as it sounds.  You can catch up on us in our first newsletter, but the long and short of it is that we’ve been busy supporting incoming NYC Mayor Bill de Blasio’s transition, and helping New York State launch a program to augment efficiency of operations and programs.

In the next week or two I’ll be sharing some of the posts we’ve been writing on the Civic Consulting USA blog, and you can always follow us on Twitter.  Of course, I’ll also be coming back with just plain old Man About Town commentary and anything that tickles my fancy.

In the meantime, I’m writing to tell you how beautiful you are, inside and out.  Oh, and to ask you for money.

Man About Town, Miles and Zach causing major damage at the Rock and Bowl A Thon.

Each year, I don a silly costume and go bowling. With a lot of yelling teenagers. For four hours.

And I like it.

It’s Downtown Art’s annual Rock and Bowl a Thon, where our young company members help raise money to support the organization. Downtown Art’s theater program is free for them, you see, and this is one way that they choose to give back.

I’m hoping you’ll join Team Mike as a way to honor their commitment, to support yours truly as an artist, and to get behind really smart, local art crafted by people who love working together. Any size donation is welcome, and giving is super easy. Just click here and pony up.

In the meantime time, stay strong and stay dapper. – MAT.

Let’s Turn this Old Barn into a Theater! (Part III of III)


Big Car in Indianapolis, IN is a former auto service center.

Dear Reader, About a year ago the Naturally Occurring Cultural Districts (NOCD) working group asked your Man About Town to write a nice, juicy case study about what happens when cultural organizations buy non-cultural facilities and fix them up.  This three part series details my findings, although it’s well worth checking out the original report to see case studies from nearly a dozen cultural organizations across the country.  You can also read Part I and Part II of this series to learn more about the unique opportunities and challenges of adaptive reuse.

You may also want to visit the Tumblr site I set up for this report, which includes links to a variety of additional resources for cultural organizations seeking their first home.

Rounding for Home

There are a number of important takeaways from this survey of adaptive reuse efforts around the country:

  • Adaptive reuse and building renovation vary significantly from new construction.It is axiomatic in the construction industry that any time you are dealing with an older building, you won’t really know the full scope of the construction project itself until you are well under way. Structural issues, compromised electrical or plumbing systems, sewage and drainage issues – any number of these may not be in the initial expected scope of work but may be identified as walls are opened up or new systems are being upgraded. Even the most experienced contractors can’t necessarily tell you if a wall is load bearing until they pull off the old plaster and see. Proceed with caution when attempting to rehabilitate an older building, and consult engineering, code, and building systems experts before fully committing to the project. For additional reference, consult online tools such as “Square Feet Seattle” (www.seattle.gov/arts/space/sqft_seattle.asp).
  • Form Affects Function at The Chocolate Factory in Long Island City, Queens, NY – photo by Sarah Maxfield

    As form affects function, so all capital projects interact with an organization’s mission. Moving into long-term control of a facility can provide new stability and opportunities for growth. It can also distract attention or even demand time and energy that cultural leaders would prefer to give to their creative work. Many of the group members in this case study discussed the tremendous effort they put into understanding the intersection of their creative practice and the facility they were building. Many were also clear that the development of the facility would require them to build new expertise, new capacities, new partnerships, and new resources. These had to be carefully managed so that they did not detract from the organization’s mission, but deepened it.

  • Developers of adaptive reuse projects must be open to change. Capital projects are complex, have long time lines, and require multiple layers of resources. It is almost certain that even the best-laid plans will have to be amended as new information comes to light. This can entail adding new partners or dropping old ones or re-evaluating deep assumptions about what’s possible in the new facility. While it is intuitive that these changes will occur, developing a decision-making structure capable of digesting and dealing efficiently with such changes is essential to maintaining an efficient process. Again, clear lines of leadership and delegation of responsibilities up front, with an understanding that these may be altered, are critical.
  • There is no substitute for local expertise
 in project development and management. Artspace (www.artspace.org) is a frequent development partner, and additional national community development intermediaries like the Local Initiatives Support Corporation (www.lisc.org), Enterprise Community Partners (www.enterprisecommunity.com), the Nonprofit Finance Fund (www.nonprofitfinancefund.org), Fractured Atlas (www.fracturedatlas.org), and others can provide much needed expertise and resource. It is clear, however, that there always needs to be on-the-ground leadership with access to key stakeholders, as well as a deep understanding of local relationships and community priorities. As noted above, plans will change. Furthermore, the more complex the project, the greater the need for anticipating community needs. Those surveyed were absolutely clear: national intermediaries were critically important, but final decision making needed to rest with local leadership who understood the community impacts of their efforts. In New York City, nonprofit culturals have been able to gain support with planning through local entities such as the Pratt Center (www.prattcenter.net), the Alliance of Resident Theatres/New York (www.art-newyork.org), borough-based arts councils, and many others.
  • The Tannery Arts Center in Santa Cruz, CA.

    Capital projects require a careful earned revenue strategy, and many times this includes cultivating relationships with cultural partners who do not have access 
to a space of their own. For most groups, the process of developing and adapting space is a leap, not 
a stretch. A number of the case study participants built both earned-revenue and operational objectives with other cultural partners in mind. In fact, many said that they viewed their developments as not just meeting the immediate developmental needs of the organization but also increasing infrastructure for other cultural partners in the community. Several spoke of their development specifically as public service or even a utility. While funding sources (both public and private) do not frequently include this in their consideration of support, it is nonetheless clearly an established reality.

  • Capital projects require significant financial support, and having a clear strategy about how the acquisition and rehabilitation will be financed or funded is key. Many projects surveyed were directly supported by a combination of public funds (usually from the city or state), private funds (from foundations and individual donors), and even borrowed funds (from a lender or nonprofit intermediary with lending capacity). Understanding how much capital the project will require, what the likely sources are for obtaining that capital, and timing the many complex pieces to come together is very demanding. Many nonprofits made use of a wide array of friends, stakeholders, contractors, and experts to accomplish the fund-raising and financing alone—even before engaging in design or construction. In addition, a number of cities blessed with a relatively large pool of capital funds nonetheless face extremely high demand and competition for support. Funds awarded can be channeled through bureaucratic processes that substantially attenuate project development. Getting clear on the nature of the entire process and establishing strong working relationships with funding partners and other stakeholders (particularly elected representatives if the project is publicly funded) will significantly improve success.
  • Leaseholds can provide a helpful foothold, but be wary of the landlord. A number of case study examples in this report leased their current facilities (and some had leased several properties in their evolution). All reported being justifiably

    The Flux Factory in Long Island City, Queens, NY

    wary of the landlord’s intentions for the ultimate disposition of the property, and several reported that the landlord was clearly bringing in artists to both improve the condition of the property and increase the overall desirability of the location. Most case study examples secured leases of between one and three years. Leases of five years or more were very rare and were reported only in those cases in which a landlord truly valued the cultural partner or, conversely, saw little value in the property. Most cultural organizations also had some form of negotiation under way to acquire the leased property but were fairly realistic about the possibility that the landlord would not sell the building and simply replace them with a higher-paying tenant at the end of their lease. It’s important to note that while leased spaces pose the risk of displacement, they can also provide an opportunity to obtain a space at a relatively low cost. Several cultural organizations were careful negotiators and secured inexpensive leases or more favorable terms in exchange for their investment of “sweat equity” in cleaning up and preparing a dilapidated space for occupancy. Finally, a number of nonprofit culturals also planned carefully, doing only as much work as necessary to make the space usable and planning investments in equipment and furnishings so that they could be removed at a later date if they relocated.

When All Is Said and Done

“Adaptive Reuse” is a broad topic. Still, there are consistencies. Potential developments tend to find 
us as much as we find them. The ability to develop and manage partnerships with a multiplicity of local stakeholders is both a necessary strength and a critical buffer. Partnerships are essential, but they add complexity that requires clear leadership and decision-making. Having a plan that extends beyond the development through operations, including engaging other cultural partners, strengthens the chances for success.

Important issues remain:

  • How can small culturals be supported in accessing temporary spaces more consistently? Most nonprofit culturals are small nonprofit culturals. For many, engaging in facilities development on their own can feel far beyond their reach. There is a need for funders, particularly public sector funders, to maximize the utility of existing cultural venues both for their primary occupants and for those there on a temporary basis. Funds to increase the operational and maintenance capacity needed for greater use would be a powerful tool to make more spaces available.
  • A former firehouse – Northside Town Hall in Williamsburg, Brooklyn NY

    How can opportunities for adaptive reuse, which are rare, be identified and targeted early?Ideally, public sector partners would provide more access to lists of publicly held vacant lots, blighted properties, and other underused spaces suitable for adaptive reuse. They would also create incentives in the forms of economic support, technical assistance, pre-funding for planning, and tools for financing on terms that small culturals could work with.

  • How do you select cultural partners who are reliable, flexible, and community oriented?  Like choosing a roommate, finding cultural partners who will help build out programming and perhaps even share some of the operational burden of a new facility can be challenging. Very little attention has been paid to this issue, and a sectoral dialogue about the difficulties and importance of making sound decisions is needed. Furthermore, standard legal agreements that can help structure and govern these relationships would go a long way toward preserving clear lines of responsibility.

Adaptive reuse, the recycling of older venues for new purposes, has long been linked with the work of nonprofit cultural practitioners. Fixer-uppers are more difficult than is new construction, but they are also less expensive and working on them frequently overlaps with other mission-oriented goals. This is likely to remain true, and with some process improvements, they could yield even greater benefits to cultural groups and communities alike.

Thanks Dear Reader for joining on this journey.  Until next time remember to stay strong, stay dapper.

Let’s Turn this Old Barn into a Theater! (Part II of III)


Grange halls make badass theater spaces.

Dear Reader, About a year ago the Naturally Occurring Cultural Districts (NOCD) working group asked your Man About Town to write a nice, juicy case study about what happens when cultural organizations buy non-cultural facilities and fix them up.  This three part series details my findings, although it’s well worth checking out the original report to see case studies from nearly a dozen cultural organizations across the country.  Check out Part I of this series to learn more about the unique opportunities and challenges of adaptive reuse.

You may also want to visit the Tumblr site I set up for this report, which includes additional links to a variety of additional resources for cultural organizations seeking their first home.

Key In-Site

Perhaps a bit literal, but you get the point.

For many nonprofit culturals, their work and their workspace are inseparable parts of a whole. The reasons for this can vary substantially: some culturals need a space suitable for rehearsal, performance, or production; some use their space to create a sense of artistic inspiration; some select their space because its location or disposition helps fulfill a component of their mission. Many spaces satisfy several of these criteria or address still other considerations.

There can be no doubt, therefore, that for many adaptive reuse developments the site itself is a key driver behind the effort.

Establishing Clear Project Leadership

Enter stage left: moo.

Many adaptive reuse projects involve multiple nonprofit and for-profit partners. Because cultural facilities in general can be costly and challenging to develop, maintain, and program, sharing these efforts makes good sense. There can be substantial challenges, however, in deciding leadership, handling critical decisions, assigning important tasks, and negotiating boundaries. In addition, attempting to change the structure of leadership after the fact is much harder than taking the time to establish it from the beginning.

There were a number of examples discovered in the course of this case study where partnerships were not so successful. The reasons for these challenges were quite consistent:

  • No clear project leader was identified and assigned the primary job of ensuring that key decisions were inclusive, timely, and complete.
  • Partners brought different strengths and challenges, but they were assigned leadership as equals. This usually burdened one group unfairly and caused resentment on all sides.
  • Once the project was completed, disagreements arose about how shared spaces and operations were to be managed within the team, again causing resentment and frustration. 
Having a process that works early to determine leadership, decision-making procedures, and how information is shared greatly decreases the likelihood of tensions as the project moves forward.

Why Your Public Needs the Public 

Many projects that are developed through adaptive reuse either come into being because their former use served a direct social benefit
or because their new nonprofit stewards wish to achieve a social benefit through the new use. In either case, maintaining strong public partnerships throughout the planning and programming stages is critical to achieving the right tenor of public support. This is particularly true when considering the needs and ambitions of the local arts community that hopes to engage directly with the new use.

In addition, very few cultural capital projects – whether adaptive reuse, substantial renovation, or new construction – proceed without public sector support. Money for building derives most often from a combination of community support provided by local elected leaders and direct funding through public dollar capital allocations (which is very much a function of community support). Additionally, a number of the more substantial capital projects referenced, particularly those involving affordable live/work space, also used access to federal funds to support the housing component. Engaging public support means having a strategy of communicating with local elected and appointed officials, including city council representatives and officials in cultural affairs, budget, finance, economic development, and similar municipal agencies. This can sound daunting, but in point of fact many groups reach their public officials through their local city council member or alderperson, who (assuming he or she supports the project) is normally eager to provide guidance.

The Business of Making Art

The Farmington Players. I’m not kidding.

Acquiring and developing facilities for nonprofit cultural use is demanding financially, technically, and programmatically. Operating a cultural facility once you have it built is equally complex. There are many variables (such as creating programs to adequately use the space or handling ongoing maintenance and utility costs) that are difficult to fully anticipate. Many nonprofit culturals see their overall capacity to develop creative engagements diminished in the short term as they allow for and adapt to the administrative and operational needs of the facility. The good news is that once ad- ministration and operations are more stable, the venue actually allows for taking greater risks and dedicating richer resources to creative productions. Having an operational model in mind when moving into a residence significantly increases the likelihood of a successful transition.

Moving into a newly adapted space usually entails a leap in operations—not a slow, steady climb. Many nonprofit culturals recognize that they themselves will not be able to fully program all the facility’s available hours. Building partnerships with other nonprofit culturals whose work is complementary can both better activate the space and bring in needed financial resources.

Stay Tuned for part three of this three part series: the takeaways.

Let’s Turn this Old Barn into a Theater! (Part I of III)


Scrappy, but lovable: the irrepressible arts.

Dear Reader,

About a year ago the Naturally Occurring Cultural Districts (NOCD) working group asked your Man About Town to write a nice, juicy case study about what happens when cultural organizations buy non-cultural facilities and fix them up.  This three part series details my findings, although it’s well worth checking out the original report to see case studies from nearly a dozen cultural organizations across the country.

You may also want to visit the Tumblr site I set up for this report, which includes additional links to a variety of additional resources for cultural organizations seeking their first home.

What the hell is “Adaptive Reuse?”

Darla’s got bling.

Nonprofit cultural leaders, like most of us, are involved in very few real estate transactions throughout our lifetimes. Whether seeking to rent or to own, we usually have limited experience in the various stages of the process: finding something we can afford in a decent location, dealing with the complications of signing a contract, figuring out how to go about fixing up the space to suit our needs and aesthetics, and maintaining it over the lifetime of our residency.

That’s why many cultural organizations turn the strategy of “adaptive reuse.”  This process concerns the acquisition and rehabilitation of spaces for development into cultural venues, and particularly concerns those spaces that were not initially built for creative sector purposes (former industrial buildings, firehouses, schools, churches), or that were built for a previous cultural use and repurposed for a new one (former vaudeville houses, movie theaters).

The decision to acquire and develop an adaptive reuse facility is as much an inspired, creative decision as a practical one connected to plans for organizational growth. Indeed, the process of taking on an adaptive reuse project almost always inspires change for the nonprofit cultural organization in turn: affecting programs and funding priorities, developing alliances and stakeholder relationships, and even altering its relationship to creative sector peers. The transformative nature of making a home through adaptive reuse can be profound.

Easier Turned into a Case Study Than Done

You could wind up against a wall.

But nonprofit culturals face a number of additional challenges that can make the process far more difficult, requiring longer development time lines, greater expertise, and substantial pools of both labor and capital. And while adaptive reuse is generally a less expensive approach to developing a cultural facility in comparison with new construction, it can pose unique problems of its own. For instance:

  • Locating development sites. There are no brokers, listing services, or exchanges that track available spaces suitable for adaptive reuse. Every acquisition is therefore the result of a specialized search, usually conducted by the cultural practitioners themselves.
  • Acquisition. The vast majority of cultural organizations are relatively small (with less than $250,000 in annual revenues), but many have substantial space needs for accommodating their creative practice – making
the cost disproportionately high. In addition, very few nonprofit culturals have the capital needed to acquire space outright and so must engage in substantial fund- raising from public and private sources. This is usually a lengthy and laborious process.
  • Closing. Whether negotiating for a lease or the purchase of property, both the relative rarity and “custom made” nature of these transactions means there are few examples of legal templates or contracts to guide decision making. In addition, access to proper legal guidance may be difficult to obtain, given cost constraints.
  • Construction and improvement. Spaces in adaptive reuse projects are usually “fixer-uppers,” to 
say the least. Many require substantial renovation to make them safe and habitable, in addition to specialized alterations to meet the needs of the designated creative use.
  • Ongoing management. In general cultural facilities tend to have a larger physical footprint, meaning that there is just more upkeep to do. In addition, to cover the larger operating costs associated with their size, many facilities provide rentals or the option to share spaces with several creative sector partners. This requires stronger administration, negotiation of boundaries and responsibilities, and higher levels of operational care than does a single-tenant property.
  • Public sector bureaucracy. Projects funded through public sources or engaging with public sector construction partners can face a bewildering array of bureaucratic procedures, experience substantial planning and funding delays, and even face political pressures affecting the development of the facility. Many case study examples noted the importance of maintaining strong relationships with local elected leaders and governmental partners and of seeking the mentorship of others who have gone through the experience before.

There’s Hope

There’s a lot to think about.

In spite of these challenges, adaptive reuse is happening all the time. There are many examples from a wide variety of real estate environments, including both “hot” markets, where increased competition tends to drive up real estate values, and “cold” markets, where population decline and surplus real estate has resulted in vacancies and (often) blight. The successful projects tend to share a number of characteristics, such as the following:

  • A “love at first site” component, where the nature of the venue itself seems to invite the possibility of conversion. Many projects have “good bones,” with deteriorated but compelling design or structural elements.
  • A process of public engagement around the planning, development, and ongoing programming of the site. This is especially true for buildings with a history of public use that the community wants maintained in any future use.
    • Access to substantial sources of public funding and the presence of strong connections to elected and appointed public leaders.
    • Clear lines of leadership and decision-making, especially when multiple creative sector partners are involved.
    • The engagement of outside professionals in real estate finance and construction management as advisors or, if funds allow, as hired supports.
    • The ability to develop a business model that supports operations while meeting creative objectives. 
While no two projects are the same, deeper analysis of these common characteristics can provide useful insights and support to those seeking to conduct their own adaptive reuse engagements.

Stay Tuned for part two of this three part series: the key components.

What do LISC, Enterprise, NFF and CSH Have in Common with the Dodo? Nothing. (Part VI of VI)


All that’s left of the Dodo. Luckily, CSH, NFF, Enterprise and LISC are all still around.

Dear reader, as part of a special report for Shelterforce I sat down with the heads of four of the largest community development intermediaries in the country and asked a simple question:  Are you still relevant?

This six part series looks at the evolution of their role in the community development sector and their strategies for the future.

To binge-read the full reportclick here.

Click on the following links to read Part I, Part II, Part III, Part IV or Part V

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Part VI - Stuck in the Middle With You

Intermediaries have become tough old birds. Given that the entire sector is probably just over 40 years old, these entities have seen a lot of bright ideas come and go. In the end, this may be their single greatest strength: they understand the unique business cycles, the key relationships, the bureaucratic mechanics, and the deep-rooted needs that compel the forces behind the machinery. Building on this knowledge and their aggregated heft, they can wedge together a transaction or relationship like nobody else. They fill a critical gap where the knowledge and practice of others cannot reach, simply because the capacity to know what they know requires an entity built they way they are built. If this sounds circular it is intentionally so. Intermediaries have evolved within a closed system catering to that system’s needs.

Intermediaries display their wares: really not much of a secret.

But there’s something else. The intermediaries have long been the research and development arm of the community development sector, providing classic “idea engineering” services. Only there’s a twist. The goal is to create a non-proprietary product, an anti-patent, a dress pattern down to the stitch work that’s hung in the shop window as marketing. While seldom recognized, this may be the single greatest contribution of the intermediaries to the sector. The ability to aggregate just enough capacity and intelligence to try, fail, flounder and evolve, then turn all the results over to someone else (often including the credit for the innovation). The intermediaries do what individual nonprofits, funders, financiers and public partners cannot or will not do: spend resources to define innovation in a sector where returns are sub-marginal to negative. Why? Because that’s how you keep growing your mission.

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Thanks for tagging along on this series about the evolving nature of nonprofit intermediaries.  Just in case you missed the previous segments, you can click on the links below:

For now, this is your Man About Town, reminding you to stay strong, and stay dapper.

What do LISC, Enterprise, NFF and CSH Have in Common with the Dodo? Nothing. (Part V of VI)


Disney’s Dodo: not known for innovative social finance policies.

Dear reader, as part of a special report for Shelterforce I sat down with the heads of four of the largest community development intermediaries in the country and asked a simple question:  Are you still relevant?

This six part series looks at the evolution of their role in the community development sector and their strategies for the future.

To binge-read the full reportclick here.

Click on the following links to read Part I, Part II, Part III or Part IV

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Part V – Staying the Same = Change

The needs of CDCs themselves have changed. “In the 1980s, NFF was lending to a largely unbanked segment of the nonprofit sector,” says Antony Bugg-Levine. “Now the banks understand that these [nonprofits] are viable borrowers.” He points out that, from a mission perspective, this is a success for the intermediaries. They nurtured this particular class of borrowers with special loan products, reduced borrowing rates, and flexible lending terms, and now many CDCs can borrow directly using conventional finance.

The bad news is they can now borrow directly using conventional finance. What’s an intermediary to do? “One of the greatest things I ever did was to start applying a ‘value added’ lens to all our work,” says Deb De Santis.

It used to be that CSH and its colleagues did the deals that others didn’t want to do. Now they are doing the deals that other folks simply can’t do.

Frieda Kahlo: not interested in trimming thorns – but LISC, Enterprise, NFF and CSH are!

Need a partner with a deeper balance sheet to support that LIHTC deal? An intermediary will find one and help you structure the relationship. Need some soft predevelopment capital or a credit enhancement on a new project because you don’t have deep pockets? Intermediaries aggregate cash (including mission-related capital) with a wide range of risk tolerances and flexible uses, taking risk on their own balance sheet to offset yours. Got a complicated, high profile project that’s entangled with some reputational risk or a testy community of stakeholders? Alongside new strategies for engaging other sectors, intermediaries have been building insights and alliances that can help you trim some thorns.

And this ain’t small potatoes. The National Equity Fund just had its two biggest years running. Enterprise has built more than 150 funds, including being one of the partners in the foreclosure abatement-focused Mortgage Resolution Fund, that address different facets of the sector. Its Multifamily Mortgage Finance group recently merged with Bellwether Real Estate Capital, a multifamily and commercial mortgage originator.

Stay tuned - your Man About Town is publishing all six parts of this series over the week.  

You missed:

Next up: Part VI - Stuck in the Middle With You

What do LISC, Enterprise, NFF and CSH Have in Common with the Dodo? Nothing. (Part IV of VI)


The Dodo hangs with Alice in Wonderland. LISC, Enterprise, CSH and NFF are not building affordable housing there.

Dear reader, as part of a special report for Shelterforce I sat down with the heads of four of the largest community development intermediaries in the country and asked a simple question:  Are you still relevant?

This six part series looks at the evolution of their role in the community development sector and their strategies for the future.

To binge-read the full reportclick here.

Click on the following links to read Part IPart II or Part III.

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Part IV - The Capital Behind the Capital

“You can’t preserve the social safety net with just one kind of capital,” says Antony Bugg-Levine. Intellectual capital, political capital, social capital—it’s no surprise these are all playing a growing role in the lives of both intermediaries and CDCs. But these days it’s not just about kicking out new ideas and products. Increasingly intermediaries are in the business of building new “open source” networks designed to increase access to a wealth of best practices tucked away in corners of the sector.

Green building – just one of the areas where intermediaries are developing consulting expertise.

For instance, each of the four intermediaries has developed a consulting capacity constructed upon existing internal expertise. Green building, health care facilities, arts and economic development, HUD contract management, board development, financial operations—active engagements exist in all these categories. And this work is not limited to CDCs either, as clients now include public agencies, foundations, even corporate partners.

What’s more, while some of the consulting consists of fairly bread-and-butter, one-off engagements, more and more of it is about addressing the needs of a whole sub-sector or cohort. Refining the process can save a substantial amount of cash, heartache, and brain drain. Can loan application procedures be streamlined so that processing them is more efficient? You betcha. Can certain entities or uses be pre-approved, requiring only a cursory credit review to proceed with closing? Even better. Can we train all the service providers in your community to access the tools and utilize the new process? Absolutely.

Policy incentives are built first, then program follows.

This evolution inverts the traditional orthodoxy of building policy around programs. More and more, we’re seeing programs built around policy. For instance, when Enterprise launched its Enterprise Green Communities criteria in 2004, it immediately set to work making those standards public, and having them adopted in state LIHTC award procedures. “We created the carrots that drew resources to the initiative,” Terri Ludwig says. This allowed Enterprise to deploy other green building loan products and, in the process, learn heaps more about evolving market needs and design consulting activities it hopes will be revenue generating.

Stay tuned - your Man About Town is publishing all six parts of this series over the week.  

You just missed:

Next up: Part V – Staying the Same = Change

What do LISC, Enterprise, NFF and CSH Have in Common with the Dodo? Nothing. (Part III of VI)


Dodo’s do not scale well. Luckily, intermediaries do. – Image by rhombitruncated.

Dear reader, as part of a special report for Shelterforce I sat down with the heads of four of the largest community development intermediaries in the country and asked a simple question:  Are you still relevant?

This six part series looks at the evolution of their role in the community development sector and their strategies for the future.

To binge-read the full reportclick here.

Click on the following links to read Part I or Part II 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Part III – The Inefficiency of Scale

“Scale,” “sustainability,” and “efficiency” are all watchwords and code words: watchwords because they define the leading edge of building capacity and longevity; code words because they typify new pressures to reduce service delivery costs while increasing and diversifying income streams. More and more these effects are achieved by the growing class of supra-nonprofits. Yet while it’s so very tempting to rely on a larger, regional provider that can build the project or deliver the service and simply get the job done, “we shouldn’t fetishize scalability,” as Antony Bugg-Levine puts it.

And there are two darn good reasons we shouldn’t.

The first and most obvious is that once the job is done the development capacity itself doesn’t remain behind. Supra-CDCs move on to the next project or distressed geography. Meanwhile, intermediaries haven’t been able to ply their craft and local CDCs haven’t grown, leaving the community with a shiny new project but no long-term increase in capacity.

Godzilla, for instance, has always posed problems of scale.

The second reason is more insidious: quite simply, we can’t scale our way out of addressing entrenched social problems. Bugg-Levine told me a story of working with 40 of the largest domestic violence shelter providers in California. Given state budget cuts, “even becoming more and more efficient is not going to ensure they can avoid going bankrupt,” he concluded. Delivering social services is not like delivering pizzas: to go where there is demand is to go the opposite direction of the market

I’ve argued before that capital markets are designed to generate wealth and concentrate capital. The populations and communities we serve exist at the margins of capital markets, where profits are fragmented, inefficient, and weak, assuming they exist at all. That’s why we focus on social benefits: our goal has never been to generate profits, but to reduce suffering and improve human dignity.

I know, I know—them’s real pretty words. But it is true. And the financial implication of this is that the best we can hope to achieve is a reduction in cost in delivering our services, or a more clever way of offsetting those costs by cross-subsidizing revenues. And then there are those places—the Texas border towns, the downtrodden second ring Detroit suburbs—where scale can’t really exist. Sometimes, that little domestic violence shelter with seven beds is really the best way to get things done.

Godzilla is cool, so here’s another picture of him kicking @$$. Let’s hope he’s not destroying affordable housing in Osaka.

The trouble is that it’s difficult to tell when trying to achieve scale runs counter to succeeding in a social purpose. Bugg-Levine says: “We need to be clearer about which organizations require subsidy because they are (1) inefficient, (2) sub-scale but could break even if scaled enough, or (3) public good providers that will always require subsidy because what they do is essential but cannot pay for itself.” Confusion reigns. Many stakeholders may irrationally hope that a No. 3 is a No. 2, or cut off a No. 2 because they think it’s a No. 1.

Intermediaries these days are playing a larger role in developing the tools to identify an organization’s true capacity. What’s more, they are increasingly tasked with providing the resources needed to either move that CDC toward greater self-sufficiency or make the case for it remaining financially inefficient in order to serve a larger need.

You just missed:

Stay tuned - your Man About Town is publishing all six parts of this series over the next week.  

Up Next: Part IV - The Capital Behind the Capital

What do LISC, Enterprise, NFF and CSH Have in Common with the Dodo? Nothing. (Part II of VI)


This picture of a feisty dodo has nothing to do with this blog. – Image by Michael Kutsche

Dear reader, as part of a special report for Shelterforce I sat down with the heads of four of the largest community development intermediaries in the country and asked a simple question:  Are you still relevant?

This six part series looks at the evolution of their role in the community development sector and their strategies for the future.

To binge-read the full reportclick here.

To read Part I in this series, click here.

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Part II – Think Locally, Act Globally

“What CDCs are experiencing is the fruit of their own success,” says Deb De Santis. There was a day when CDCs had these neighborhoods pretty much to themselves. All the hard work that CDCs have put into fixing up troubled communities, particularly in the development of affordable housing, but including the provision of social supports, workforce development, educational resources, public safety, and a host of other issues—all these have brought some stability and economic vitality. These neighborhoods are much more attractive. Now these same organizations are competing with for-profit developers and other specialized nonprofit service providers in an environment with fewer resources available to do the work and (at least these devilish days) much greater need.

Think Local Natives: they rock. They also have nothing to do with this blog.

All four intermediaries commented on this growing bifurcation in the field: There are the big, scaled supra-CDCs that can deliver projects quickly and efficiently, but that frequently focus on the more straightforward deals with the usual partners around the table. And then there are those scrappy, quirky, capable little folks who are building on funky “leftover” lots, cobbling together a dozen sources of capital, many from unconventional sources, and including atypical uses such as community cultural spaces, food distribution points, or small commercial enterprises. They survive on local knowledge, creativity, longstanding relationships with community stakeholders, and the ability to successfully engage the big boys as needed.

The intermediaries have been busily adapting to this by building capacity both up and down the demand chain.

As Michael Rubinger points out, “It used to be wither the CDCs go, so go we.” That’s changing. These days, while a CDC partner is “always in the mix” with LISC, only about half their direct partners are CDCs. LISC compensates for this by having local offices that can dig down deep to assess needs and find those marginal projects where the little folks need a boost (CSH has its own system called the “Community Scorecard” designed to do much the same thing). These smaller players are acting within a more complex, more demanding ecosystem with a higher bar for entry. It’s not that intermediaries are bringing these smaller CDCs into the mainstream, it’s that the intermediaries are bringing the mainstream to them.

Sometimes you have to fight for your slice of the pie.

Meanwhile, all the intermediaries are also vying to create competitive financial products specially tailored to meet the needs of those supra-CDCs. These folks, after all, are big consumers of structured tax credit tools built around Low Income Housing Tax Credits (LIHTC) and New Markets Tax Credits (NMTC), as well as pre-development, acquisition, construction, cash flow and even mini-perm financing. What’s more, these tools are being applied to a much wider array of nonprofit commercial uses, including school and health care facilities financing. This way lies mainstream profitability for the intermediaries, and they have a big stake in defining their role as “market makers” as much as “market meeters.”

In this emerging environment, the job of the intermediary is to maintain those deep connections on the ground, while simultaneously staying one step ahead of the new competition with greater scale, higher functionality, and longer reach.

The intermediaries are really facing parallel challenges to their CDC peers: now that they’ve proven the market, they’re having to fight to keep a slice of the pie. Some of the very groups they successfully nurtured many years ago have grown far beyond their original borders, and now have multistate, regional reach or have expanded deeply into development sectors that take them far afield from their initial niche practice. They are both comrades and emerging competitors, taking on scaled delivery of community development efforts in weak CDC markets, and in certain cases directly competing with the intermediaries for resources.

Stay tuned - your Man About Town is publishing all six parts of this series over the next week.  

You just missed:  

Part I – So, What Exactly Is an Intermediary Anyway?  

Next up: Part III - The Inefficiency of Scale

What do LISC, Enterprise, NFF and CSH Have in Common with the Dodo? Nothing. (Part I of VI)


The dodo has nothing to do with this blog series. Really. – Image by Daniel Eskridge

Dear reader, as part of a special report for Shelterforce I sat down with the heads of four of the largest community development intermediaries in the country and asked a simple question:  Are you still relevant?

This six part series looks at the evolution of their role in the community development sector and their strategies for the future.  To binge-read the full report, click here.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Part I – So, What Exactly Is an Intermediary Anyway?  

We tend to think of intermediaries as the middlemen: an extra layer that’s somehow always in the way; a necessary, bureaucratic inefficiency; a pass-through delivery mechanism; a glorified gatekeeper that makes retail out of wholesale.

I believe intermediaries are misunderstood. Not just in their intentions, but in their capacities, their scale, their reach and their roles.

I’ve been a funder and lender to many nonprofit intermediaries over the years, and I’ve also run a nonprofit intermediary of sorts myself. I’ve argued in the past, and not exclusively from self-interest, that intermediaries play a critical role in the community development ecosystem, sitting at the center of a web of relationships that both binds and strengthens connections between nonprofit service providers (CDCs in particular) and supporters in the public, private, and philanthropic sectors.

But our world keeps a changin’. CDCs are both more and less than they used to be. Many of the more sophisticated community development nonprofits have moved beyond their community organizing roots, relying less on external advocacy and more on internal capacity to get things done. These organizations have grown both horizontally and vertically complex, highly professionalized, and multijurisdictional.

The days of plain vanilla are over.

At the same time, other CDCs have faced contractions resulting from challenges in maintaining effective operations and management, fewer development opportunities, and changing market conditions. These groups now have even less capacity to deal with aging and struggling housing portfolios, putting substantial sections of the affordable housing stock at risk. Even those nonprofits that have, for lack of a better word, remained successfully “artisanal” in their focus on a specific community or development strategy can find themselves struggling with more complex projects. For many, the days of the “plain vanilla” development opportunities are gone. They’ve either been done, or they are now handed off to those scaled developers who can shave the margins and deliver projects in a cheaper, faster way.

How have community development intermediaries evolved and adapted to this new environment? What role do they see themselves playing in this brave new world? What risks and challenges await? And what effects will these changes have on CDC partners?

I spoke with the leaders of four of the largest community development intermediaries in the country: Antony Bugg-Levine, CEO of the Nonprofit Finance Fund; Deborah De Santis, president and CEO of the Corporation for Supportive Housing; Terri Ludwig, president and CEO of Enterprise Community Partners; and Michael Rubinger, president and CEO of LISC. The consistency of their responses was somewhat surprising given their different organizational priorities and cultures and the reflections, corrections, and directions they lay out are quite telling.

Based on the thoughts of my four esteemed interviewees, I have glimpsed the future. It’s, well, complicated.

Stay tuned – your Man About Town is publishing all six parts of this series over the next week.  

Next up:  Part II – Think Locally, Act Globally